Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 41 $ 63 31 350 568 670 units 310 units Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 16 Harbour has monthly overhead of $174,710, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 73,320 57,190 44,200 $174,710 The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 454994 Number of inspections 300 365 665 Number of machine hours 1,500 1,100 2,600 Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Overhead Assigned Home Model: Work Model: Total Overhead Cost 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Unit Cost 3. Calculate Harbour's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Gross Margin 4. Select the appropriate cost driver for each cost pool and calculate the activity rates if Harbour wanted to implement an ABC system. Setup Costs Quality Control Maintenance 5. Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Assigned To Home Overhead Assigned To Work Setup Costs Quality Control Maintenance Total Overhead Cost 6. Calculate the production cost per unit for each of Harbour's products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Unit Cost 6. Calculate the production cost per unit for each of Harbour's products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Unit Cost 7. Calculate Harbour's gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Home Work Gross Margin 8. Compare the gross margin of each product under the traditional system and ABC. (Round your answers to 2 decimal places.) Home Work Gross Margin (Traditional) Gross Margin (ABC) Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $171,106 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines: Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Cost Assigned to Pool $ 3,036 $ 31,570 $136,500 Quantity/Amount Consumed by Basic 22 moves 200 inspections 5,000 machine hours Quantity/Amount Consumed by Luxury 44 moves 100 inspections 4, 100 machine hours Required: 1. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Basic Model Luxury Model Overhead Assigned Overhead Assigned 2. Calculate the activity rates for each cost pool in Hazelnut's ABC system. (Round your answers to the nearest whole dollar.) Activity Rates Materials Handling Quality Control Machine Maintenance per Move per Inspection per Machine Hour 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Basic Model Materials Handling Quality Control Machine Maintenance Total Overhead Assigned 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. (Round your intermediate and final answers to the nearest whole dollar.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned $ 0 4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system. (Round your intermediat final answers to the nearest whole dollar.) Luxury Model Materials Handling Quality Control Machine maintenance Total Overhead Assigned 0 5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? Traditional System O ABC System
